OCTOBER 11, 2000

EM.TV share price bottoms out and begins to climb

THE share price of EM.TV has begun to recover after a disastrous couple of days at the start of the week. The share price tumbled to a low of 34.70 Euros on Tuesday afternoon before the price began to recover and in the course of Wednesday continue to rise although there is still a long way to go before it gets back up to previous levels in the mid 50s.

The volume of shares being traded is still small with only just over one percent of the company having changed hands. This would seem to suggest that the big shareholders such as the investment house Hellman & Friedman and the Henson Family (which sold the Muppets to EM.TV earlier this year) are still holding on to their shares - or may be selling them off quietly in small parts. The Haffa Family retains 51% of the shares in the company and so has ultimate control.

What is more significant, however, is that the value of the company has plunged with the price of the shares, tumbling from $8bn to just under $5bn. This means that half of EM.TV is now worth only $2.5bn. Thomas Haffa is asking $2bn for EM.TV's shares in Formula 1 despite the fact that the sport contributed only around 30% of EM.TV's income. In other words, Haffa will have to drop the price if he wants to sell the F1 shares.

The Haffa Family says it wants to retain control of the business but it might be convinced to sell the majority if it feels that the family fortune is in danger. The weak share price means that a corporate raider could gain a big shareholding in the company and then begin pressuring Haffa to sell either its extensive media assets or the F1 involvement.